Rising power prices put higher burden on low-income households than on wealthy ones

RWI

The doubling of electricity prices in Germany from 2000 to 2016 had significant distributional effects, because low-income households spend a larger share of their income on energy than wealthy households, said industry-funded Rhineland-Westphalia Institute for Economic Research (RWI) in a research paper. “While the share of electricity costs of the income of wealthier households is around 1.5 percent, a three-person household at risk of poverty had to spend almost 5 percent of its income in 2016 to pay for electricity costs,” writes RWI in a press release.